The governments of Punjab and Khyber Pakhtunkhwa came down hard on the federal government on Saturday over the “ongoing financial crisis”, alleging that the Centre had withheld provincial shares at a time when they were conducting flood relief operations.

Since coming to power in April, the coalition government had not transferred Rs120 billion to the KP government alone, KP Finance Minister Taimur Khan Jhagra told reporters at a press conference in Lahore. He was accompanied by Punjab Finance Minister Mohsin Leghari and Punjab spokesperson Musarrat Jamshed Cheema.

Of this withheld amount, Rs30bn was meant for the newly merged tribal areas, stifling development projects, Mr Jhagra said, insisting that cutting off these areas from the mainstream could have far-reaching security-related consequences that would not be limited to just Peshawar and KP.

The federal government had also not transferred Rs5bn meant for health cards to six million people in tribal areas but had released Rs16bn for its MNAs.

“Now think you are in Waziristan and Bajaur and you get to know about this, what kind of questions will come to your mind?” he wondered.

Mr Leghari also claimed that the federal government had not released any relief fund for flood recovery and the premium of the Universal Health Insurance Scheme (health cards) of Islamabad, Gilgit-Baltistan and Azad Jammu and Kashmir.

He alleged that the federal government had been weakening the federation by not paying the provinces’ shares at a time when they were conducting flood relief operations with their own resources.

Paying all dues, including the National Finance Commission (NFC) award and net hydel profit, were routine matters that should be done automatically, he said, adding that this atmosphere of non-cooperation was causing “irreparable damage to economy”.

Against this backdrop, the Punjab government still gave a Rs14 billion package to repair flood-hit infrastructure, which was made possible by controlling other ongoing and development expenses, he said.

To a question, Mr Leghari said the economy grew on the back of investment, which is directly affected by government instability, something that would continue to linger on if snap polls were not held.

Mr Jhagra also insisted that fresh general elections were the only solution to resolve the financial crisis. He said the KP government could not sustain itself without the federal government support, as the provincial economy could not meet its expenses without net hydel profit, NFC share and public sector development programme projects.

The federal government had stifled the country’s economy by withholding due funds of the provinces, he said, adding: “The country’s economy runs on budgets of the provinces.”

If the investment was not made in the provinces, the national economy would be affected due to the non-availability of funds, he said.

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